Swedish criminal gangs using fake Spotify streams to launder money | Hacker News Reader

Swedish criminal gangs using fake Spotify streams to launder money

theguardian.com

76 pointsbookofjoe81 comments

Given my experience and knowledge of how Spotify deals with much-less nefarious uses of fake streams, I'm very skeptical of these claims. There's a significant (several month) delay between a Spotify stream and the artist getting a payout. (This is probably shorter if you're Taylor Swift, but the artist profiles involved here aren't.) During this time Spotify will indeed do some checks for stream legitimacy. It's not hard to detect a song from a completely unknown artist somehow getting 1 million streams from southeast Asia.

Given that and the overall inefficiency of this scheme, my uneducated guess would be the "anonymous gang member" decided to fuck with the reporter by coming up with an outlandish, yet plausible-at-a-surface-level scheme, similar to Tony Soprano messing with his golfing buddies by telling them fake mob stories.[0]

[0] https://www.youtube.com/watch?v=i0D3xkOeMdA

To be fair, relatively obscure, low budget, and overtly gang-affiliated music is all over Swedish Spotify, it's regularly making the charts.

It's a touchy subject as you're very likely to face accusations of racism and discrimination if you question the overnight popularity of this obscure music genre, so I can see why they'd be especially hesitant to look under this particular rock.

Considering you can just upload white noise and make money it's not entirely implausible.

https://www.bloomberg.com/news/newsletters/2023-08-17/white-...

If the accounts listening to these white noise streams are paying customers it puts Spotify in a bit of bind, because these people are actually paying to listen to white noise.

The article also mentions the journalist talked to the police who have kind of confirmed it.

The white noise stuff is entirely different from this... the two problems with the white noise podcasts are

1) it sneaks into the recommendation algorithm. There's legitimate reasons to want to listen to white noise, but the likelihood that someone listening to a podcast wants to next listen to 3 hours of white noise is effectively 0.

2) perception of fairness due to the "artist pool" that Spotify uses. Is it fair that a team of musicians, singers, engineers, etc. gets paid the same for a stream as someone who just uploaded 3 hours of white noise? Debatable. (I'm sure this will start happening with AI/procedurally generated music at some point, too.)

The users listening to the white noise are real people who are paying or hearing ads. It's not really relevant to the article at hand.

> The article also mentions the journalist talked to the police who have kind of confirmed it.

> The Swedish company said it was not aware of any contact made by law enforcement

If there's no actual case, it just means someone in law enforcement sent an email. They may have been told the story by the very same "anonymous gang member."

The trick here is that they aren’t just driving fake streams. They are burying the fake streams in amongst legit streams.

I’m still a little sceptical of this article’s claims, but there is absolutely a problem with fake streams/stream manipulation.

I have a .com domain that I have been using for many years where a catch-all e-mail is configured. Since some time someone was creating fake Spotify accounts using my domain.

I don't have configuration error, no malware or anything like that and I contacted my e-mail service provider Zoho to check this out and they are positive that the e-mails I'm receiving from Spotify are authentic and there's no breach on their part.

I also contacted Spotify and they are absolutely sure that it's not possible to create accounts without confirming e-mails and can't do anything about it.

I have no idea how these accounts are created without me confirming the e-mail address but they are obviously fake, like a common name and numbers @mydomain .

So I used the forgot my password option to log in to check out what those accounts are doing and they were listening some obscure songs.

At some point, the person running the scheme decided to move to another domain as I received e-mail address change mails, they moved to some random .xyz domains.

Still keep receiving "3-months for free" promo from Spotify for those fake accounts.

https://dropovercl.s3.amazonaws.com/208ea6fc-821c-4d51-8c46-...

So yep, I'm sure there are many scams going on in Spotify.

> I also contacted Spotify and they are absolutely sure that it's not possible to create accounts without confirming e-mails and can't do anything about it.

Yeah that's not true. We discovered someone was using my son's email address for their Spotify when he tried to register for an account. There are plenty of other accounts of this happening: https://community.spotify.com/t5/Accounts/Why-Does-Spotify-N...

It might be fixed now, but what you're saying was definitely true for a good few years.

Notice How I keep receiving Spotify promotions for the fake accounts created on my domain. Does this look like Spotify did something about it?

Whatever, I'm not going through all this BS again. Spotify has it's own "Spam box" because it is possible or was possible to create Spotify accounts without verification and a subset of it is created on my domain and I'm not going through the process of fixing up the Spotify's fake account problem.

Someone created these, I tried to inform Spotify about it and if they are find with paying for the streams these accounts (probably) generate, it's all fine by me.

Yeah, ours was to an email account I'd registered for my son but wasn't checking regularly. Once we found out someone else had used it for Spotify I found loads of marketing spam from them in the inbox. I think it is fixed for new accounts but they obviously haven't bothered to go back and verify everyone who registered before that change.

This happened to me on one of my domains, and Spotify support was similarly useless.

I finally resolved it by resetting the passwords and deleting 5-10 accounts a day, until the spammers decided continued use of my domain wasn’t worth their time.

Seriously? According to the article, their only "proof" is that four criminals said "oh yeah I do this trust me bro". This qualifies as "investigative journalism" today?

Judging by the quality of journalism these days, yes this qualifies as investigative journalism.

People get the quality of journalism they pay for I guess...

Saw this same article on a Finnish news site last week and it indeed feels like clickbait / bullshit reporting with no concrete proof of any of this happening.

In the Swedish coverage they also identified bot farms that are actively used for this purpose. So it's a bit more than hearsay.

Bot farms is wildly different than money laundering.

Yeah it isn't clear how they are doing it. Are they using fake accounts with paid membership or free accounts? Both are ineficient but the latter is way more inefficient

They are using bitcoin (dirty money) to buy Spotify plays (clean money)

Botted plays are definitely real, but not typically used like this. Typically the scam for botted plays is either someone straight up selling stream purchases i.e. "buy Spotify 10000 plays for $10" or using them to boost perceived legitimacy. You would do the latter with a typical label scam, where you contact someone on Soundcloud, saying you are XXX Record Label and you want to sign their track, linking to XXX Record Label's Spotify account which shows impressive play numbers. You "sign" the track but then request a $50 "mastering fee" from the artist before release.

In either case, Spotify (usually, afaik) doesn't pay out for the actual botted streams, but it doesn't matter. The money is made by the scammer from the artist.

>Seriously? According to the article, their only "proof" is that four criminals said "oh yeah I do this trust me bro".

Same article mentions further down that the Police have also basically confirmed it is an issue but Spotify aren't acknowledging them.

I couldn't find any official statement from the Swedish police about this case. The "proof" is once again that an "anonymous investigative police officer" said it and they assumed it to be true.

I imagine that there might be some degree of truth to this story, but as it's written right now it's pure clickbait.

They declined interviews with Swedens largest newspaper and their written response was "we have no evidence money laundering is happening on our platform". Safe so say a lot of Swedish people aren't happy with how they're handling this.

The way Spotify allocates stream revenue to artists has been extremely broken for a long time. It's been chock full of scammers for ages.

The problem is that there's some kind of amplification effect where if you pay 10 USD/month for an account and stream 24/7 you can move more than 10 USD/month in the total payout of the platform.

Even if you get < $10 it can still be worthwhile for money laundering purposes.

Indeed. From what I've read, excellent quality fake USD go for a 50% — or more — discount from face value.

Just so I'm clear then.

If I want to launder 100$ using this scheme.

I setup a Spotify Account, to stream my 'Music'.

Then I hire some bot farm to listen to my 'Music'.

Then Spotify pays me the ad-revenue since so many people are listening to my music?

So if I can hire the bot farm (and whatever other overhead expenses are needed), I just need to get $50 from ad-revenue to justify spending $100 on bots?

It seems like the bots would cost more? If bots are this cheap, I'd think more people would use them just to pump their numbers.

> It seems like the bots would cost more? If bots are this cheap, I'd think more people would use them just to pump their numbers.

I don't think bot sales platforms are places most people would discover on their own, especially if they are willing to take money that is considered dirty.

I don't think it's ads, it's subscription revenue.

> It seems like the bots would cost more? If bots are this cheap, I'd think more people would use them just to pump their numbers.

Who's to say they don't?

This just doesn’t sound realistic. It’s extremely inefficient and the pay out is low. There are a million of better ways to launder money.

Yeah it seems to be a big plot hole, I need a diagram of how this is supposed to work and which part of the stack has illicit funds to convert

I doesn't need to be millions of dollars per day to be happening, and worthwhile for the gangs.

Money laundering works best when you've got a lot of different streams of it, spread across many different economies. You want the dirty money dispersed to as many unrelated people as possible. Because it's easier for 100 people to each do something with $100 of dirty money than for 1 person to do something with $10,000 of dirty money.

And Spotify doesn't have any reason to try to stop it. They're not likely to lose customers of it, and it makes their numbers go up.

Spotify also doesn't want to remove fake artists. The company doesn't really care about listeners.

Seems... particularly inefficient. I would've thought there were easier ways.

There is...you're asked about your bank account, then few days later you receive $100,000 along with info to send it to another 5 accounts $20,000 each. Guess what happens next?

That's just a straight-up scam rather than laundering, generally (the money resulting from _that_ would then need laundering).

Money muling (the activity I described above) is a type of money laundering.

Oh, I assumed you were referring to the style of scam where a reversible/essentially phantom payment is made to someone's account (traditionally cheque, but it happens with credit transfers), and they make _real_ payments elsewhere (either via cash, crypto, or more difficult to reverse credit transfer). Initial transfer bounces, victim (or _maybe_ bank, depending) is out 100k.

It's just not that useful in Sweden, I'd assume. You want to get the money into the banking system and stay there. What you describe is easily traceable and reversed. Unless you transfer it abroad to... less civilized countries, it's not really helping you.

I find it really hard to believe that this Spotify scam is more effective than some classic Forex scam.

It has the added benefit of both laundering money and acting as advertisement for criminal gangs. Most of the largest rappers were associated with gangs and the artists even got invited to interviews and got played on radio. Plausibly all this made possible by getting the initial publicity through Spotify.

Unless these gangs have found a way to make money on Spotify, which isn't available to the average artist then I can't imagine it being particularly effective.

The scheme makes no sense to me, but in society like the Swedish where banks are heavily regulated and monitored and where cash is used less and less it might be one of the last ways of laundering money. Still, they are taking SEK, buying crypto, using the crypto to buy fake stream of "music" they put to Spotify to get a meagerly pay out for played streams. The "loses" on each laundered kronor must be immense.

It seems 30% platform commission is pretty standard across digital platforms (apps, books, music). I'm not well versed in the world of money laundry, so I don't know if that's efficient or not. But if you're willing to pay the commission it seems pretty easy to launder money via fake apps/books/music or other digital goods than can be generated with near zero marginal cost.

I wonder why Sweden is seeing an increase in criminality. Better seal my lips if I want to keep an account on HN.

Why I find interesting is how some topics are basically self-censored whilst we like to pretend we’re having a free discussion.

> Why I find interesting is how some topics are basically self-censored whilst we like to pretend we’re having a free discussion

Propaganda doesn't work because people actually believe it. It works because everyone thinks that everyone else has that information, and that's what the authority wants to believe, so you keep quiet and pretend you believe it. So does everyone else. So in the end everyone complies.

But Solzhenitsyn said it better: “We know that they are lying, they know that they are lying, they even know that we know they are lying, we also know that they know we know they are lying too, they of course know that we certainly know they know we know they are lying too as well, but they are still lying. In our country, the lie has become not just moral category, but the pillar industry of this country.”

It's like these politically correct discussions, everyone knows what the elephant in the room is, but everyone pretends to not see it.

Exactly, and this kind of selective ignorance actually costs everybody dearly in the long run. Because we just cannot please everybody.

We've had a rapid uncontrolled population increase, this in combination with a overregulated housing market causes problems.

(housing regulation being rents are controlled for first party renters(artificially low)). This regulation means it's impossible to find a rental where you want to live because nobody builds them (they wouldn't be profitable).

This is not the answer, but it belive it's part of it.

That we increased our population with people who are either not educated or can't get their educations verified is also a problem.

When I was younger I had faith the government was doing what's best for it's people, that's eroded into "these populist aholes will say anything to win votes no matter how it affects people"

The superstrict regulation (but not enforcement, except when it's convenient) on drugs probably doesn't help either. I know a dude that was recently fined 19000 SEK for a couple grams of pot, he went to court and won though.

My country is broken, in a seemingly unbreakable downwards spiral to becoming a first class shithole.

Population increase yes, from immigration. The problems coming from the segregation stem from immigration (almost per definition), not "population increase" which sounds like Sweden experienced a huge baby boom.

Sugar coating the problem or painting a different picture than what it is, is part of the problem. For example, of course there are challenges and costs with immigration, and it doesn't help anyone pretending there aren't. Of course immigration from low-education countries will have on general lower education. Pretending otherwise will ensure they won't get the help they need to become a part of the society. Of course patriarchical society immigrants will generally have a patriarchical mindset. It doesn't help that turning a blind eye to that just because you (not you specifically) is afraid being called a racist for calling that out.

Thanks for coming to my TED talk.

Sorry, but please state a source for that claim.

Now, I'm not much better, but from what I recall crime in general is going down - but there are some notable exceptions (gang crime related specifically).

https://www.statista.com/statistics/533790/sweden-rate-of-cr...

Seems like it's flat/down over the last 10 years.

A quick look at the number of shootings over the past six years shows that the number of fatalities in shootings reached a new record in 2022. Moreover, a report published by the Swedish national council for crime prevention in 2021 found that Sweden was the only European country in which the number of fatal shootings per 100,000 inhabitant increased since 2000.

https://www.statista.com/topics/7088/crime-in-sweden/

Yep. But, not to be confused with overall crime rate (which my parent was referring to)! That's a very dangerous slide in facts.

Funny thing is a good chunk of the biggest pop hits (and probably Spotify streams) are rooted in Swedish production. Max Martin alone is tied with George Harrison for production on number of Hot 100 songs[0].

For a population of roughly 10 million Sweden punches WAY above their weight in pop music (as well as other genres).

So we have Swedish gangs manipulating a Swedish platform that also has a lot of music Swedes have had a hand in. Fascinating!

[0] - https://en.wikipedia.org/wiki/Max_Martin

Aren't these Swedish criminal gangs somehow part of Spotify itself? They at least scratch each other's backs and both make money, by extracting from funds that should go to artists.

> Describing the process, he said the gangs would convert their dirty cash to bitcoin, then used the cryptocurrency to pay people who sold fake streams on Spotify, which is a Swedish company.

Could have swapped to Ether and sold a newly launched NFT collection to themselves

The dirty money holder purchases the collection across several addresses, the “artist” keeps the proceeds and cashes out

Faster, involves less people, plausible deniability with a little marketing campaign

This is interesting, since a german rapper and music label owner was accused of doing this to push his signed artists and launder his money from his former criminal activities. A "hacker" was whistleblowing this in a documentary on YouTube[1] a while ago.

[1] https://www.youtube.com/watch?v=qiqYuSQwkHo

The sums seem too low to be plausible, but other platforms and "talent" could scale a bit better. Scheme would be: cash -> visa gift cards/cryptocurrency -> subscription to "talent" on platform -> legit fee deposits to "management company" -> ...

Some might call that laundering, but most people just call it publishing.

People are skeptical, but pretty much any online service that generates cash for end users will eventually be used for money laundering.

I agree Spotify is a particularly poor choice, but the expected payoff for many criminal activities are also extremely low.

I’m guessing some people tried, and either gave up, or are loosing an absurd fraction of the laundered cash.

I am almost certain similar laundering has been rampant on Twitch for a long time as well.

serious question: for pages like OF, spotify, YouTube, what deincentivizes creators from amassing fake subs/followers? Sub count actually matters when getting new subs so (ie: most people are more likely to sub to 1m Youtube subs than 1k subs) wouldnt all creators then seek out fake profiles services when theyre getting started?

You are not wrong that big content-creators can more easily get 1000 new followers than someone starting from scratch. But the amount of followers is only one metric that for example the YT-algorithm uses. Viewer-retention, amount of comments, amount of videos posted and the length of plus probably hundreds of other metrics are important as well and only ticking one of those boxes will only get you so far

What music do they upload?

Automated AI generated music in all genres, this all reminded me of this thread I read on reddit a while ago: https://old.reddit.com/r/Music/comments/15wnw74/is_ai_creati...

Who’s gonna save the world tonight?

The way that the criminals are abusing stuffs never ceases to amaze me. That's why we can't have nice thing.

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